Giving away the Facebook fortune

Facebook CEO Mark Zuckerberg and his wife Priscilla Chan celebrated the birth of their daughter Max with a promise to give 99 percent of their Facebook shares to a new charity. The couple announced the move in a letter addressed to their baby. (Reuters)

THERE’S BEEN a curious backlash to the news that Facebook founder Mark Zuckerberg and his wife, Priscilla Chan, intend to give away 99 percent of their fortune. Or maybe not so curious: Americans always have regarded the super-rich with a mixture of admiration and envy, fondness and dislike. Given the couple’s youth, and the immensity of their wealth, it’s not surprising if suspicion and resentment are added to the mix.

But, honestly — would it be better if they didn’t give the money away? Would we rather they imitate so many other billionaires and just pamper themselves?

One complaint is that they are giving the money to a limited liability corporation, rather than a traditional nonprofit. Mr. Zuckerberg said this allows flexibility in investing, including in worthy for-profits. He said any money the LLC makes will be plowed back into their charitable ventures.

We don’t pretend to understand all the tax consequences of this, although it seems the LLC has no more advantages than a nonprofit and perhaps fewer. People do receive an income tax deduction when they donate to charity, and they also can avoid capital gains taxes on gifts of stock that has appreciated in value. Whenever it is suggested that these benefits be capped in some way, members of Congress of both parties rise up as one, joined by every museum, symphony orchestra and United Way in the country. If you want to take them all on, we may stand with you. But let’s not blame Mr. Zuckerberg and Ms. Chan when we go down in flames.

Then there’s the objection that Ms. Chan and Mr. Zuckerberg are getting a public relations benefit. So what? The robber barons of more than a century ago no doubt hoped to burnish their images when they made donations, but would we have been better off without the Rockefeller University or the Carnegie Library downtown? Besides, Mr. Zuckerberg would have gotten as good press with a promise of half his fortune; he didn’t need to pledge 99 percent.

Finally there’s the worry that the Chan-Zuckerberg money will somehow let the government off the hook, or will influence policy in a way that only government should be allowed to do. This argument strikes us as particularly silly. The Facebook fortune is worth about $45 billion. The annual federal budget is upwards of $3.5 trillion. Mark Zuckerberg and Priscilla Chan with their generosity will be able to positively affect many lives, but only if they spend their money wisely.

The model here is Bill and Melinda Gates, whose foundation is having a huge, and hugely positive, influence, not so much because it is generously endowed, though it is, but because of the Gates approach to philanthropy: identify areas of greatest need and potential progress; measure the impact of your intervention; adjust and correct as necessary. Demonstrated success, especially in improving the health and nutrition of the world’s poorest children, attracts support from governments as well as other billionaires.

If Ms. Chan and Mr. Zuckerberg have accepted the Gates model as a challenge to be emulated and even improved upon, we think the logical response would be a simple thank you.